Good parents know that part of their “job” is to teach their children how to navigate life’s risks and handle its responsibilities. One of the fundamental lessons is how to safely cross the road – stop, look and listen. This is a life lesson so basic that it applies to a lot more than just getting to the Starbucks across the street.
Good business owners know that part of their job is to prepare their company for growth – to minimize the risks, understand and accept the responsibilities, and provide a logical plan. When going to the next level they take time to position themselves for success by stopping, looking and listening.
Stop
A lot of owners are surprised to learn there are danger zones for small businesses when they expand. They only see growth as a positive step forward; not understanding that if not done correctly it’s actually high risk. Many successful companies have failed because they didn’t plan for the new problems, responsibilities and challenges which come with the next level.
They didn’t take the time to stop and think about what it really means. It requires improved management skills and an increased understanding of business issues. The management and personnel issues are more complicated. There’s an increase in tax and government regulations. Also, developing a working knowledge of the financials is vital.
They didn’t take the time to stop and think about what it really means. It requires improved management skills and an increased understanding of business issues. The management and personnel issues are more complicated. There’s an increase in tax and government regulations. Also, developing a working knowledge of the financials is vital.
Look
Look at where the company has been, is currently and where it’s going. Owners believe that what they did in the past got them to the current point of being able to expand and it will serve them well in the future. So, they think their good to go.
However, that’s not what usually happens. There’s a tipping point where the ignored problems of the past and present increase exponentially in the future. As a company grows the weaknesses become more pronounced and do more damage. A classic example is with finances.
If an owner didn’t develop an understanding of margins, profit and loss in the past, and doesn’t think he needs to learn it in the present, he may put himself out of business in the future by expanding. Financial ignorance has closed thousands of business during a growth phase – generating revenue isn’t making a profit and the more customers it has the faster a company can lose money.
Listen
The bigger a company grows the more people it needs for its success. Success isn’t a solo act and smart owners know it. They understand that growth requires them to shift from a one person management approach to a team one. They seek out others’ ideas, listen to them and are open to change.
Many owners are resistant to this step, believing they know better or it implies weakness to ask for help. However, this thinking is dangerous to a business, as no one person can be expected, by others or himself, to know everything.
Past success doesn’t guarantee future success – we all know people stuck in their glory days. Owners become stuck in their past successes when they don’t understand that growth in the business requires them to grow too. It’s important for both children and adults to acquire the ability to stop, look and listen.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
